Dear Friends,
Lately I’ve been wondering how conservative policy ideas would have fared had they been enacted given the economic situation…
Take the idea to not tax dividend income. Or not to tax, from firms, money paid as dividends to shareholders. Were this idea enacted a stream of revenue for the government to spend in it’s profound wisdom on things like; $900.00 toilet seats, $500.00 hammers, and such important knowledge as how many points on a maple leaf, would be cut off. Lets face it, firms would spend that money on foolishness, like upgrading their manufacturing process to make themselves more competitive in the global environment. Or heaven forbid, paying more dividends to their shareholders. It goes without saying the waste that the people would put that money to. Food, clothing, shelter, and maybe even going out to eat! We all acknowledge with the socialists that government spends our money far better than us…
Kidding aside, This would be a great incentive for firms to pay more money in dividends. No mater if the firm receives the tax break or the shareholder gets the tax break. The incentive will be for more corporate earnings to be paid out as dividends instead of executive bonuses.
With more firms paying dividends more money would be invested in the stock market long term. Seeking safe and steady earnings growth with dividends. This would naturally give the markets more momentum and less volatility. Less volatility would mean less sudden drops and surges. Investors would feel safer if the stocks they held were paying dividends, especially tax free dividends, and they would be less inclined to pull out in a sudden loss of stock value. (They are looking for dividends not stock upswings). If investors were more interested in dividend income and less interested in stock value growth the markets would be far more stable…
Another idea of the conservative economists was Social Security Reform. The third rail of politics. Conservatives keep touching it over and over. Because something must be done. The more dangerous is Medicare/Medicaid this beast is projected to grow into a behemoth in a few years. Never the less Social Security is an opportunity that could improve the economy, actually protect the interests of retired people, and be solvent into the foreseeable future.
Allow people at their discretion to invest a part of their FICA withholdings into the markets. Have a few preselected funds that are available based on sound, well diversified portfolios, available to the people and let the free market work. Couple this with ending the double taxation on dividends and the stock market would have exponentially greater strength to weather a storm like the one we find ourselves in.
You have probably read our idea for Capitalist Social Security;
http://incapp.org/yabb/YaBB.pl?num=1237724030
Our idea would not only protect the people of the present but would build wealth within the societal structure. This loam spread out among the many fields would ensure better harvests in good times and bad…
